KUALA LUMPUR: Bank Negara Malaysia has decided to keep its overnight policy rate (OPR) unchanged at 3.00 per cent as per economists' projections.
The central bank has not hiked rates this year.
Its last rate hike of 25 basis points was done last May.
In a statement after its Monetary Policy Committee (MPC) meeting today, Bank Negara said at the current OPR level, the monetary policy stance remains supportive of the economy and is consistent with the current assessment of the inflation and growth prospects.
The MPC remains vigilant to ongoing developments to inform the assessment on the outlook of domestic inflation and growth.
"We will ensure that the monetary policy stance remains conducive to sustainable economic growth amid price stability," it said in a statement.
Bank Negara said inflation in 2024 is expected to remain moderate, broadly reflecting stable demand conditions and contained cost pressures.
"The outlook for the rest of the year is dependent on the implementation of domestic policy on subsidies and price controls, as well as global commodity prices and financial market developments," it said.
"After incorporating the potential impact of subsidy rationalisation, headline and core inflation are projected to average between 2.0 per cent - 3.5 per cent and 2.0 per cent - 3.0 per cent for the year respectively," it said.
According to Bank Negara, the global economy continues to expand amid resilient labour markets in some countries and continued recovery in global trade. Looking ahead, the central bank said global growth is expected to sustain, as headwinds from tight monetary policy and reduced fiscal support are cushioned by positive labour market conditions and moderating inflation.
For the Malaysian economy, Bank Negara said the latest indicators point towards higher economic activity in the first quarter of 2024, driven by resilient domestic expenditure and a positive turnaround in exports.
Going forward, it said the recovery in exports is expected to gather momentum supported by the global tech upcycle and continued strength in non-electrical and electronics goods.
"Tourist arrivals and spending are also poised to rise further. Continued employment and wage growth remain supportive of household spending," it said.
"Investment activity would be supported by the ongoing progress of multi-year projects in both the private and public sectors, the implementation of catalytic initiatives under the national master plans, as well as the higher realisation of approved investments," it added.
On the ringgit, Bank Negara reiterated its stance that its current value does not reflect Malaysia's economic fundamentals and growth prospects.
It said the coordinated initiatives by the government and Bank Negara with the government-linked companies (GLCs) and government-linked investment companies (GLICs), and corporate engagements have gained further traction, cushioning the pressure on the ringgit.
"BNM will continue to manage risks arising from heightened financial market volatility. "Over the medium term, domestic structural reforms will provide more enduring support to the ringgit," it added.